Earthlink 2010 Annual Report Download - page 29

Table of Contents
quarterly cash dividends and continue to pursue our new business strategy, which may involve future acquisitions, will depend largely upon our
future operating performance and our ability to access the capital markets. Our future operating performance is subject to general economic,
financial, competitive, legislative and regulatory factors, as well as other factors that are beyond our control. Our business may not generate
enough cash flow, or future borrowings may not be available to us, in an amount sufficient to enable us to pay our debt or fund our other
liquidity needs. If we are forced to pursue any of the above options under distressed conditions, our business could be adversely affected.
In addition, adverse conditions in the capital markets, which in recent years have significantly reduced the availability of corporate credit,
could continue to affect the global financial system and equity markets, which would limit our access to the debt and equity markets at a time
when we would like, or need, to access such markets. This limitation could have an adverse effect on our flexibility to react to changing
economic and business conditions.
Risks Related to Our Consumer Services Segment
We face significant competition in the Internet industry that could reduce our profitability.
We operate in the Internet access services market, which is extremely competitive. We compete directly or indirectly with established
online services companies, such as AOL and the Microsoft Network; national communications companies and local exchange carriers, such as
AT&T, Qwest and Verizon; cable companies providing broadband access, including Charter Communications, Inc., Comcast, Cox
Communications, Inc. and Time Warner Cable; local and regional ISPs; free or value-
priced ISPs, such as United Online, Inc. which provides
service under the brands Juno and NetZero; wireless Internet service providers; content companies and email providers, such as Google and
Yahoo!; and satellite and fixed wireless service providers. Competitors for our consumer VoIP services include established telecommunications
and cable companies; ISPs; leading Internet companies; and companies that offer VoIP services as their primary business, such as Vonage.
Competitors for our advertising services include major ISPs, content providers, large web publishers, web search engine and portal companies,
Internet advertising providers, content aggregation companies, social-
networking web sites, and various other companies that facilitate Internet
advertising. Competition in the market for access services is likely to continue increasing, and competition could cause us to decrease the pricing
of our services, increase churn of our existing customers, increase operating costs or decrease the number of subscribers we are able to add.
We believe the primary competitive factors in the Internet access service industry are price, speed, features, coverage area and quality of
service. While we believe our Internet access services compete favorably based on some of these factors when compared to some Internet access
providers, we are at a competitive disadvantage relative to some or all of these factors with respect to other of our competitors. Current and
potential competitors include many large companies that have substantially greater market presence and greater financial, technical, marketing
and other resources than we have. Our dial-
up Internet access services do not compete favorably with broadband services with respect to speed,
and dial-
up Internet access services no longer have a significant, if any, price advantage over certain broadband services. Most of the largest
providers of broadband services, such as cable and telecommunications companies, control their own networks and offer a wider variety of
services than we offer, including voice, data and video services. Their ability to bundle services and to offer broadband services at prices below
the price that we can profitably offer comparable services puts us at a competitive disadvantage. In addition, our only significant access to offer
broadband services over cable is through our agreement with Time Warner.
We experience pricing pressures for certain of our consumer access services, particularly our consumer broadband services, due to
competition, volume-
based pricing and other factors. Some providers, including AT&T, have reduced and may continue to reduce the retail price
of their Internet
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